Mekong backs $50m round for Vietnam microlending player

The round was led by Vietnam-Oman Investment Fund (VOI), a joint venture between Oman Investment Authority and the State Capital Investment Corporation of Vietnam that focuses on socioeconomic and environmental impact investments that bridge the Middle East into Vietnam.

VOI has disbursed about US 300m across renewable energy, clean water, healthcare, education, and agriculture since its inception in 2009. F88 represents its first investment in financial services.

Mekong is investing through its fourth flagship fund (and fifth overall), which closed on USD 246m in early 2021, more than doubling the size of its predecessor. The fund typically takes stakes of 40% to 45%.

The private equity firm first invested F88 in 2017, providing a USD 10m Series A, according to AVCJ Research. This was followed by two rounds featuring Ireland’s Granite Oak Advisors in 2018 and 2020. The latter amounted to USD 6m and saw Mekong re-up. CLSA Capital Partners and UK-based Lendable provided USD 70m in debt last year.

F88 offers secured lending, insurance products, utility bill payments, mobile money transfer, and e-wallet deposit and withdrawal, among other financial utility services to underbanked and unbanked people as well as micro-businesses. It claims to be one of only a few private small lending companies locally capable of satisfying the strict social impact criteria of Mekong and VOI.

F88 also claims to be the fastest-growing financial services company in Vietnam, having grown from 15 locations at the time of Mekong’s first investment in January 2017 to 830 branches currently. This makes it one of the largest lending companies in the country.

The plan is to operate 1,400 branches and have a market capitalisation of USD 1bn by 2024. At this point, the company will pursue an IPO.

The Series C capital will otherwise be used to develop technology, including data analytics and data science, as well as to advance programmes around branding and acquiring new customers. There are also plans to expand the team and develop existing human resources.

Founded in 2001, Mekong claims the longest track record in Vietnam private equity. It is best known for securing an overall return of 57x across multiple exits of electronics and appliances retailer Mobile World in the early 2000s. Chris Freund, founder of Mekong, said in a statement that F88 had a “high chance” of being as successful as Mobile World.

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• Topics
• Southeast Asia
• Financials
• Expansion
• Vietnam
• Mekong Capital
• Financial Services
• Impact investment